Sanctions and their discontents

Economic sanctions occupy the space between words and military actions.

- PRADEEP SRIVASTAVA

‘Though never uninhabited, this space has been seeing increasing activities in recent years, notes Urjit Patel in his new book The Great Sanctions Hack. Sanctions may be imposed for diverse objectives: Regime change, compelling policy changes, deterring undesirable behaviour, or simply constraining rival's economic capacity. As evident in the Russian sanctions, they may even have multiple objectives, simultaneously to punish, to degrade military-industrial capacity and to demonstrate political resolve.

Sanctions are increasingly complemented by secondary sanctions that escalate economic warfare. These measures threaten penalties not against the primary target, but against third parties, typically firms or financial institutions that continue doing business with the sanctioned entity. The United States (US) has deployed secondary sanctions extensively, leveraging the dollar’s reserve currency status and American dominance in global finance. Its imposition of additional tariffs on India for oil purchase from Russia is another example.